Search results for: working family credit

Working Family Credit Works

Conservatives and progressives don’t agree on much—especially in the area of tax policy. However, one program that draws support from both ends of the political spectrum is Minnesota’s Working Family Credit. This tax credit helps families across the state meet basic needs while also encouraging work. At the same time, the credit helps to reduce…

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Are 529 Tax Breaks Working?

In order to incentivize families to save for their children’s college education, Minnesota and other states are exploring income tax credits and deductions for 529 plans. Named after section 529 of the Internal Revenue Code, these investment vehicles were designed to encourage parents to save for college by granting tax breaks on higher education savings…

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Minnesota’s Working Poor Still Hurting

About a quarter of a million Minnesota workers had cause to celebrate earlier this week, as the state’s minimum wage increased. However, millions of workers in Minnesotans and other states are still stuck in low wage jobs that do not adequately compensate them for the essential work they do. While Minnesota workers are doing modestly…

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Wisconsin Grows Poorer, More Unequal Relative to Minnesota

Minnesota’s median income grew faster than the national average over the past decade, as noted in part 1 of this series. And while Minnesota income inequality has increased, it has increased less rapidly than the national average. Meanwhile, in Wisconsin, median income growth fell short of the U.S. growth rate and income inequality increased at…

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Minnesota vs. U.S. Income Trends Since the Great Recession

When it comes to income trends in Minnesota, we’ve got some good news and some bad news. The good news is that income growth in Minnesota has surpassed the national average over the last decade, both in aggregate and within every income group. The bad news is that income inequality has increased over this period,…

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Poor People Have the Highest Effective Tax Rates

An argument used to undermine programs that provide tax relief for low-income people—such as Minnesota’s Working Family Credit (WFC) and Child & Dependent Care Credit—is that they provide tax relief to households that are not paying taxes in the first place. However, poor people do pay taxes. In fact, as a percent of income, they…

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Tax Conformity Impasse Was Only Partially About Conformity

In the recently concluded legislative session, lawmakers failed to agree on how to conform Minnesota’s tax code to the new federal tax law passed late last year. The Governor and conservative leadership agreed on most of the mechanics of federal tax conformity, with some significant exceptions. Where they did not agree was on how to…

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Our Top Takeaways from the 2018 Minnesota Legislative Session

The Minnesota House and Senate adjourned late Sunday night, and brought the 2018 legislative session to a close. With Governor Mark Dayton likely to follow through on threats to veto key pieces of legislation, the complete book on the session is still being written.   Here are quick takes from North Star’s three policy experts…

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Generating State Revenue Through Corporate Tax Conformity

The so-called “Tax Cut and Jobs Act” (TCJA) enacted by Congress last year made massive changes to the federal tax code. Minnesota and other states must now decide if and how to conform their own tax codes to the federal changes. As we note in part 1 of this series, the qualified pass-through income tax…

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